Option Value of Disability Insurance in Canada
Chapter in NBER book Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement (2016), David A. Wise, editor (p. 137 - 178)
We investigate the importance of the financial incentives for work and retirement embedded in Canada’s public retirement and disability benefit systems. We extend previous research on incentives for retirement by incorporating the structure of incentives in the Canada and Quebec Pension Plan disability benefits, and through careful attention to the impact of self-assessed health status. We find the financial incentives embedded in the public pension system have a significant and substantial effect on the likelihood of entering retirement, but the impact of disability benefits is overshadowed by regular retirement benefits. We also find that the response is driven by those with lower self-assessed health.
This paper was revised on August 4, 2017
Document Object Identifier (DOI): 10.7208/chicago/9780226262604.003.0003
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